Atlas Cycle NCD gets A plus from Crisil

THE CREDIT Rating Information Services of India (Crisil) has assigned A plus (single A plus) rating to the Rs. 16.50 crore non-convertible debenture (NCD) issue of Atlas Cycle (Haryana). Atlas, formely Atlas Cycle Industries, has been placed under rating watch with developing implications.

The rating watch is based on Crisil's opinion that ongoing developments in the company regarding ownership and management control between various members of the promoter family and the possible re-organisation of the operations of Atlas into three subsidiaries could have a material impact on the credit risk profile of the outstanding debt instrument.

Atlas had initiated a restructuring exercise in 1999-2000 whereby three new wholly owned subsidiaries were created, each being named after the respective cycle manufacturing locations, namely, Atlas Cycles (Sonepat), Atlas Cycles (Sahibabad) and Atlas Cycles (Malanpur). Although the originally stated intention of setting up these subsidiaries was to treat them as profit centres, current developments indicate the likelihood of a distribution of assets and liabilities into these companies.

Crisil's rating is based on the uncertainty associated with the ownership of the rated debt as well as the credit profile of the new holder of the said instrument. The rating action also takes into account the company's satisfactory operating performance for 2000-01.

Crisil is in dialogue with the management of Atlas to review the implications of the various options being contemplated by the management.

Corporate Bureau

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Section  : Business
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